How Analysts View Copper Miners amid the Market Carnage

What Analysts Project for Freeport-McMoRan This Year

By Mark O'Hara
|
Feb 13, 2018 9:51 am EST

Analyst ratings

Freeport-McMoRan (FCX) has received a “strong buy” rating from one analyst, while five analysts have given it a “buy” or some equivalent rating. 14 analysts have a “hold” rating on the stock while the remaining three analysts polled by Thomson Reuters on February 9 rate Freeport as a “sell.”

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The stock carries a mean consensus price target of $19.93, which represents a 13.4% upside over its February 9 closing prices. In contrast, Freeport carried a one-year target price of $18.39 on January 24, one day before its earnings release. Let’s look at how analysts changed their recommendations on Freeport after its 4Q17 earnings release.

Analyst action

On January 26, Deutsche Bank raised Freeport’s target price from $15 to $16 while maintaining its “sell” rating. On January 29, Citi raised Freeport’s target price from $16 to $18. More recently, on February 6, Stifel raised Freeport’s target price from $16 to $18, while on February 8, Berenberg raised Freeport’s target price from $13.5 to $15.4.

4Q17 earnings

Freeport reported adjusted EPS (earnings per share) of $0.51 in 4Q17 as compared to adjusted EPS of $0.34 in 3Q17 and $0.25 in 4Q16. The company generated adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $2.1 billion in 4Q17, which is the highest quarterly adjusted EBITDA it has posted in the last three years. You can read Freeport-McMoRan’s 4Q17 Earnings: What You Need to Know for a broad overview of Freeport’s 4Q17 financial performance. Southern Copper (SCCO) also posted a sharp increase in its 4Q17 EBITDA as higher copper prices (XME) (RIO) boosted mining companies’ earnings.

In the next article, we’ll see how analysts are rating Glencore (GLEN-L).